Trading Volume

  • Posted: 20 October 2011 08:32 PM

    You would think that after Tuesday earnings miss, that AAPL’s trading volume would zoom with the selloff.  That doesn’t appear to be happening.

    The big volume day since OCT 4th (44 million shares on big selloff with no news) was yesterday with 39 million shares the day after earnings report.

    Since FEB 28 2005 (day after last split) AAPL has traded over 40,000,000 shares 260 times out of 1616 trading days (16%). So you wouldn’t think a 40,000,000 share day was all that uncommon (one average about once every 6 trading days).

    Average daily volume since Feb 28 2005 has been 27.5 million shares.

    But then if 40 million shares in a day is relatively common, how come we haven’t seen that volume since earnings?

    I’m interpreting the lack of meaningful volume as the institutions aren’t participating.  This is a retail trader selloff and should come to an end fairly quickly (tomorrow last day?)

    I believe WS was properly impressed/encouraged by TC’s and PO’s conference call comments/guidance.

    That also means that if the CNBC brothers were correct, that the institutions stopped buying at $410, then come Monday, if AAPL is still trading ~$395 we may see volume increase with the institutions picked up cheap shares.  As a cautionary note, I would not expect them to do so if they didn’t feel they would make 20% on their money by January ($480 target?).  My present target is $470 (ISM of 17).

    Buying on Weakness will be very interesting to watch on Monday.

    On a side note Sentiment is holding up very well on AAPL’s intraday low.  It is currently at +11.67.  Average intraday low Sentiment during FQ4/11 was +2.11.  Scale is -100 to +100.  Above 5.00 is very bullish.  Below -5.00 is very bearish.

    On the other side, AAPL’s intraday high Sentiment is -6.18.  Average intraday high Sentiment for FQ4/11 was +3.24.

    AAPL’s intraday high’s low performance is indicative of a selloff, but the high intraday low Sentiment indicates that the selloff doesn’t include the institutions.

    My comments here are intended to illustrate institutional interest, and should not be considered a timing tool (TA).  I’m only trying to determine how the institutions are reacting to Apple’s fundamentals.

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    Posted: 20 October 2011 09:00 PM #1

    Gregg, have you tried this with a weighted average?

    I wonder if the conclusions may be different (and more accurate) if you assigned greater weight to more recent years?  (I have no idea.)

    I’m remembering your observation from some time ago that volume, in general, has declined…can’t remember the time period to which you referred off the top of my head.

         
  • Posted: 20 October 2011 09:29 PM #2

    lovemyipad - 21 October 2011 12:00 AM

    Gregg, have you tried this with a weighted average?

    I wonder if the conclusions may be different (and more accurate) if you assigned greater weight to more recent years?  (I have no idea.)

    I’m remembering your observation from some time ago that volume, in general, has declined…can’t remember the time period to which you referred off the top of my head.

    The only weighting I did was to account for total shares outstanding.  That’s why I looked back to Feb 2005.  I could shorten to about 2 years and see what happens but my retro test on my Institutional Sentiment indicator went back to fiscal 2005 and there were no exceptions.

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    Posted: 20 October 2011 10:20 PM #3

    Gregg, your conclusions from two years would be very interesting! smile

         
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    Posted: 21 October 2011 01:54 AM #4

    Gregg Thurman - 20 October 2011 11:32 PM

    You would think that after Tuesday earnings miss, that AAPL’s trading volume would zoom with the selloff.  That doesn’t appear to be happening.

    The big volume day since OCT 4th (44 million shares on big selloff with no news) was yesterday with 39 million shares the day after earnings report.

    Since FEB 28 2005 (day after last split) AAPL has traded over 40,000,000 shares 260 times out of 1616 trading days (16%). So you wouldn’t think a 40,000,000 share day was all that uncommon (one average about once every 6 trading days).

    Average daily volume since Feb 28 2005 has been 27.5 million shares.

    But then if 40 million shares in a day is relatively common, how come we haven’t seen that volume since earnings?

    I’m interpreting the lack of meaningful volume as the institutions aren’t participating.  This is a retail trader selloff and should come to an end fairly quickly (tomorrow last day?)

    I believe WS was properly impressed/encouraged by TC’s and PO’s conference call comments/guidance.

    That also means that if the CNBC brothers were correct, that the institutions stopped buying at $410, then come Monday, if AAPL is still trading ~$395 we may see volume increase with the institutions picked up cheap shares.  As a cautionary note, I would not expect them to do so if they didn’t feel they would make 20% on their money by January ($480 target?).  My present target is $470 (ISM of 17).

    Buying on Weakness will be very interesting to watch on Monday.

    On a side note Sentiment is holding up very well on AAPL’s intraday low.  It is currently at +11.67.  Average intraday low Sentiment during FQ4/11 was +2.11.  Scale is -100 to +100.  Above 5.00 is very bullish.  Below -5.00 is very bearish.

    On the other side, AAPL’s intraday high Sentiment is -6.18.  Average intraday high Sentiment for FQ4/11 was +3.24.

    AAPL’s intraday high’s low performance is indicative of a selloff, but the high intraday low Sentiment indicates that the selloff doesn’t include the institutions.

    My comments here are intended to illustrate institutional interest, and should not be considered a timing tool (TA).  I’m only trying to determine how the institutions are reacting to Apple’s fundamentals.

    I don’t like to believe anyone blindly..  but I dont think the brothers are lying.  They watch that stuff all the time.  They trade on that information.  They don’t care what ‘we’(retail) do, because we don’t do anything for the most part. 

    The brothers track that big money paper and trade off of it.  They watch the options contract volume and the shares.  I still need to get all that info that they get one day.  I have not figured out the exact cost but I know that the CBOE charges different amounts to get different levels of info.  I hope its as easy as purchasing those info subscriptions.

    Keep in mind the max pain thesis..  if you haven’t checked out Travis’ site then I would do so.  If your playing probabilities, which you are..  then you should ‘get’ (and use) what he does.

    Max pain is right here @ 395..  we are right in the pocket, and according to homeboy we are ‘right where we should be’.  Using his model and going out a strike or two past the max pain point, gives one a 98% success rate.  That is clocked over the last couple years (i think)..  it might even be longer.

    I expect the stock to end right here tomorrow..  and I sold 370/365 NOV put spreads today to capitalize on Nov’s highest OI on puts, which I think was at 385..  whatever it is I sold the second strike below it, it could of even been 375/370’s I sold.  20% gain after commissions and all that, providing the thesis holds and we are at least over 375.

    I also chose 375 because 371 is the current 100day MA..  so by the time NOV roles around 375 should be @ or slightly below what will be the 100day then.

    Have you ever checked into the Max Pain apple site? 
    http://www.aaplpain.com/Site/Home/Home.html